Government ‘will not hesitate’ to ensure retailers give drivers fair fuel prices
Fuel retailers have been threatened with state intervention over prices by the business secretary, who urged companies “to take any steps necessary” to ensure affordable prices for drivers.
In a letter to retailers on Thursday, Grant Shapps said the government “will not hesitate to act to ensure competition is healthy and consumers get a fair deal on their fuel.”
The Competition and Markets Authority (CMA) “will continue to investigate the retail sector further,” looking at “the relationship between wholesale and retail fuel prices,” the business minister said.
It was “concerning” to see the regulator had discovered “retail fuel margins rising year on year over the past five years ahead of general inflation,” Shapps said.
There was also evidence that “on occasion” the price of fuel had “fallen more slowly than it rises following changes in the price of crude oil.”
The competition watchdog would also probe “factors driving local and regional variations in prices, and the role played by major supermarkets in the road fuel retail sector.”
While prices of petrol and diesel have shot up for consumers, there has been no difference in petrol wholesale costs paid by retailers and only a modest rise for diesel, versus a year ago, according to RAC figures.
Consumers face an extra £4 average cost to fill up a full tank of petrol, at £84 while an average tank of diesel is now £15 more expensive than a year ago, coming in at £97.
The RAC’s fuel spokesperson Simon Williams welcomed Shapps’ intervention and said it hopes the letter “leads to some long overdue lower prices on supermarket forecourts which more accurately reflect the fall in the cost of wholesale fuel.”
There had previously been concerns that the government’s cut to fuel duty in March had not been passed on to consumers, although Shapps said on Thursday that he was “encouraged” to see Brits had now felt the impact of savings.
A CMA spokesperson said: “Following our urgent review in the summer, we are now using our compulsory information-gathering powers to probe the entire road fuel market.
“We will continue to gather evidence to inform our work ahead of our next update, which we will publish in the spring.”